CHAMWE KAIRA
The Bank of Namibia’s stock of international reserves declined by 2% to reach N$54,3 billion at the end of March.
The decrease stemmed from higher net commercial bank outflows on account of higher imports and portfolio outflows over the month, coupled with increased government payments, the central bank said.
The foreign reserves translated into 3,8 months of import cover, continuing to remain above the international benchmark of three months and adequate to support the Namibia Dollar and the South African Rand currency peg. Notably, the import cover excluding imports of oil exploration and appraisal activities stood at 4,3 months at the end of March, relative to the 4,4 months recorded at the end of February.
The banking industry’s cash balances increased to N$7,1 billion in March, from N$5,2 billion posted in February. The observed increase in liquidity is mainly on the back of diamond sales as well as increased government expenditure.
Growth in M2 (Money Supply) rose to 11,6% at the end of March relative to a growth of 10,3% in February.
On the contrary, domestic claims registered a negative growth for the second month consecutively, reflecting a subdued demand. The increased growth in M2 was further reflected by a strong growth in currency outside depository corporations as well as the demand deposits supported by a consistent growth in the longer dated deposits.
PSCE slowed to 1,3%, year-on-year in March, compared to a growth rate of 1,7 % at the end of February. The decline in PSCE growth stemmed from a lower demand and net repayments from both the households and corporate sectors.
Growth in credit extended to businesses slowed further to 0,1% in March, compared to 0,6% recorded in February. The decrease in the growth of credit advanced to businesses was on account of lower demand and repayments by corporates in the wholesale and retail trade, manufacturing as well as the financial services sectors.
Growth in credit extended to households moderated to 2,2% at the end of March, from 2,4% reported in February. The slower growth in credit extended to households stemmed from lower demand and net repayments in all the credit categories.
Overdraft credit contracted to 0,8% albeit lower at the end of March, compared to a deeper contraction of 1,5% in February.
The decrease was mainly due to lower demand and repayments by corporations in the services as well as wholesale and retail trade sectors.
Other loans and advances contracted by 0,3% at the end of March, compared to 0,4% posted at the end of February. The sluggish growth stemmed from a lower demand by both the households and businesses, specifically corporates in the financial services sector.
The annual growth in instalment sales and leasing credit slowed to 12,6% in March, relative to 13,2% at the end of February. The slow growth mainly emanated from a lower demand from both households and businesses.
The annual growth in mortgage credit growth stood at 0,4% in March, lower than the 0,8% recorded in February. The lower growth in mortgage credit mainly emanated from lower demand from the household sector and repayments by the corporate sector.
